How do I "mask" out certain areas of a photo?
Blender's compositor can be used to mix together video and still images. The render output of a 3d scene doesn't have to be used in the compositor, any image or video can be input and placed on top of another using a mix node.

A transform node can move and resize the image. A mask can then be used to cut out part of the image you are adding, box and ellipse mask nodes are available in the compositor, you can also create odd shaped masks in the UV/Image editor which can be animated if you want the mask to move or distort over time.